Real Property – Slander of Title – Taxation – Tax Sale Irregularities – ‘Malice’

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In failing to give notice of a tax sale to the record owner – even when his wife appeared in person and asked about any outstanding taxes – the defendant-county acted at least recklessly. However, the master-in-equity applied the wrong standard for “malice” in a slander-of-title case. The master found that malice requires an intent to injure; in fact, in a slander-of-title case, malice includes a defendant making a slanderous statement, without a legal basis for doing so, that the defendant should recognize would result in harm to the plaintiff’s interest.

We reverse the master’s decision in favor of the county. We remand for consideration of each element of slander of title and the proper standard for malice.

Facts

In 1998, the owner of the property in question, Debra Foxworth, failed to pay her property taxes. In 1999, the county commenced delinquency proceedings. That same year, Foxworth’s bank commenced foreclosure proceedings. The unpaid 1998 taxes were not discovered during the foreclosure proceedings, which resulted in a deed to the bank, or when the bank sold the property to Wilton Gleason (Wilton).

Despite the foreclosure proceeding and the resulting recorded transfers of the property, the county sent its delinquency notices to Foxworth, not to the bank or Wilton. At a delinquent tax sale, the county sold the property to James Fields.

During the redemption period, Wilton’s wife, Sara, went to the county tax office because Wilton had not received a tax bill. The county provided her with a tax bill addressed to a Charleston address at which neither Sara nor Wilton had ever lived. Sara paid the bill and asked whether any other taxes remained unpaid.

The county initially told her that no other taxes were due at that time but subsequently informed her the 1999 taxes had not been paid. She paid those taxes the next month. The county did not inform her of the 2000 tax sale to Fields or of the right to redeem the property from that sale.

Subsequently, the county issued a tax deed to Fields, which he recorded. The tax deed listed Foxworth as the defaulting taxpayer and “record owner.”

For several years, the Gleatons received and paid annual tax bills for the property.

Eventually, the tax collector discovered that Wilton had not been properly noticed as to the tax sale. The tax collector had Fields convey the property back to Foxworth via a quitclaim deed. The Gleatons were not notified.

When the Gleatons tried to sell the property to Donnie and Connie Hall, the Halls discovered the quitclaim deed from Fields to Foxworth. The Halls declined to buy the property, and Wilton filed suit against the county alleging slander of title. Wilton passed away, and Sara was substituted as plaintiff.

Discussion

The master ruled the county’s actions did not result in any publication and did not contain any statement that was knowingly false or made in reckless disregard of its truth. The master determined that Fields’ quitclaim deed to Foxworth was the only statement derogatory of Wilton’s title. No evidence supports these findings.

The three redemption-period letters sent by the delinquent tax collector, the tax deed to Fields, and the quitclaim deed that the county facilitated from Fields to Foxworth are all published statements that demean Wilton’s status as the property’s true owner.

As for knowing falsity and reckless disregard, beyond the obvious fact that Wilton was the record owner throughout the time period, there is the fact that Sara paid the 2000 property taxes in person, specifically requested information on any unpaid taxes for the subject property, and updated her address with the county, yet the county later engineered a quitclaim deed to someone else.

The master found that malice requires an intent to injure; however, in a slander of title case, malice includes a defendant making a slanderous statement, without a legal basis for doing so, that the defendant should recognize would result in harm to the plaintiff’s interest.

The county was at least reckless in failing to notify Wilton— the record owner—of the right to redeem the property during the redemption period. When the county realized the owner of record at the time of the tax sale (Wilton) had not been properly noticed of the tax sale, the county had Fields deed the property back to the defaulting taxpayer—Foxworth—instead of informing Wilton and resolving the situation in a logical and reasonable manner. These errors require reversal and a remand for the master to consider each element in a slander of title action and the proper standard for malice.

Reversed and remanded.

Gleaton v. Orangeburg County (Lawyers Weekly No. 011-050-23, 7 pp.) (Blake Hewitt, J.) Appealed from Orangeburg County (James Jackson, Master-in-Equity) William Franklin Barnes, John Parker and John Elliott Parker Jr. for appellant; Jerrod Austin Anderson and Andrew Lindemann for respondent. South Carolina Court of Appeals